Administration & Management
Strategic Plan

Introduction

NSF's leadership in advancing the frontiers of science and engineering
research and education is complemented by its commitment to excellence
in administration and management (A&M). The agency has a solid history
of leveraging its agile, motivated workforce, management processes, and
technological resources to promote the progress of science and engineering(1)
through investments in PEOPLE, IDEAS, and TOOLS(2).

For more than 50 years, NSF's high-performing workforce has enabled
discovery, learning, and innovation across the science and engineering
frontier in research and in education. New customer-focused eGovernment
capabilities have significantly improved the agency's ability to solicit,
review, select, award, and report on government-funded research and education
projects. The agency's paper-based work processes have evolved to capitalize
on technology-enabled ways of doing business, allowing the agency to serve
as an effective and capable steward of the taxpayer's resources.

NSF's focus on demonstrating management excellence is sharpened through
attention to specific issues. For example, the President's Management
Agenda mandates that NSF, like other agencies, demonstrate consistent
results through proven management practices in: Human Capital Management;
Expanding eGovernment; Competitive Sourcing; Financial Management; and
Budget and Performance Integration. In addition, the agency proactively
addresses management challenges identified through internal review and
oversight as well as those identified by the agency's Inspector General
and the General Accounting Office.

Global trends in science and engineering research and education as well
as emerging societal trends also influence the agency's A&M priorities
and approaches. For example:

The scope and complexity of science and engineering opportunities
and challenges at the frontier increasingly require partnership approaches
in project development, review and execution.

Technological innovation -- especially in such areas as high-speed
computing, communications, and collaboration -- is yielding new approaches
to scientific inquiry and education, boosting productivity and increasing
access to science and engineering research and education opportunities
for all.

The importance of science and engineering discovery, learning and
innovation is gaining greater prominence and at the same time is subject
to more public scrutiny, requiring that the agency operate with due
emphasis on accountability, openness, and responsiveness to the citizenry.

The realities of today's world require that NSF appropriately secure
its resources and institute adequate safeguards for its working environment
and critical systems.

Administration & Management Goals

The agency's highest standard for excellence in management is sought
through close attention to the following A&M strategic goals:

Business Processes: effective, efficient, strategically
aligned business processes that integrate and capitalize on the agency's
human capital and technology resources.

Technologies and Tools: flexible, reliable, state-of-the-art
business tools and technologies designed to support the agency's mission,
processes, and customers.

Achievement of these goals demands a sustained commitment to business
innovation achieved through consideration of what the agency does and
how it does it. Implementation strategies capitalize upon the complex
interdependencies between Business Processes, Technologies and Tools
and Human Capital investments. They support NSF's science and engineering
research and education mission and acknowledge stakeholder needs, including
those of individual researchers and educators and those of the agency's
institutional partners.

NSF Business Analysis: A Systemic Approach

Beginning in FY'02 NSF will initiate a comprehensive, multi-year Business
Analysis, the outcomes of which will inform A&M investments for the foreseeable
future. The Business Analysis will:

Document each of the agency's core Business Processes and
define its contribution to the NSF mission

Define process effectiveness and efficiency improvements that leverage
past experience, capitalize on best practices in the public and private
sectors, and respond to emerging mission-related trends

Develop future-looking Business Process scenarios and criteria
for success

Define a Human Capital Management Plan to provide next-generation
human capital capabilities. The Plan will identify future-looking workforce
competencies and describes human capital strategies and approaches to
support the Business Process scenarios and to capitalize on opportunities
afforded by Technologies and Tools innovations.

Define an Integrated Technologies and Tools Plan (business
infrastructure tools, knowledge bases, and technologies) that describes
an overall integrated technical and information architecture for future
systems and capabilities in support of the agency's Business Processes.
The following mission-focused core Business Processes define
how the agency delivers value to its science and engineering stakeholders
and to the nation and form the framework for the Analysis:

Resource Allocation: setting the right priorities...
A resource management process that incorporates performance results
and other inputs to prioritize agency programmatic and management
investments across organizational levels, resulting in a balanced,
performance-based portfolio.

Merit Review: identifying people, ideas and tools with
the greatest potential for impact...
A fair, competitive, transparent merit review process for selecting
projects, managed in the context of priorities, and through which
the agency realizes its outcome goals.

Award Management and Oversight: the award cycle, beginning
to end...
A collaborative, multi-functional award management and oversight process
that (1) is informed by appropriate risk management strategies, (2)
ensures performance outcomes are appropriately identified, (3) optimizes
connections between discovery, learning, innovation and widespread
practice through effective evaluation and communication, and (4) verifies
that projects are in compliance with award agreements and federal
regulations.

Knowledge Management: the right information, in the right
places, at the right time...
A comprehensive set of information management and communication activities
that capture, synthesize and highlight knowledge generated by NSF's
investments - in order to provide NSF management and the agency's
many stakeholders with reliable, readily available, and accessible
information about agency priorities, achievements, and contributions.

Performance Assessment and Accountability: the highest
standards of excellence and integrity...
A thorough performance assessment and accountability process that
develops and measures effective performance indicators and ensures
the agency is held accountable for meeting its mission and goals.

Business Analysis inputs and outputs are summarized in the table
that follows.

The outcome of NSF's Business Analysis is an A&M management and
investment strategy focused on quality, efficiency, agility, flexibility
and mission responsiveness and designed to realize the agency's Human
Capital, Business Processes and Technologies and Tools
goals.

Addressing the President's Management Agenda

The Business Analysis also serves as an overall framework for agency
activities planned within each of the President's Management Agenda
initiative areas. The remainder of the Plan describes NSF's A&M approach
to address the President's government-wide initiatives:

Strategic Management of Human Capital

Expanding Electronic Government

Competitive Sourcing

Improved Financial Performance

Budget and Performance Integration.

President's Management Agenda
Strategic Management of Human Capital

NSF supports discovery, learning and innovation to secure U.S. world
leadership in science and engineering. The agency's diverse, knowledge-rich
workforce of approximately 650 permanent and visiting scientists and
engineers (about 65 percent of whom are permanent government employees),
450 administrative personnel (who provide business operations support),
and approximately 300 program support personnel enable the agency
to meets its mission and goals. NSF's workforce is complemented by
200 on-site contractors who perform commercial administrative duties
in, for example, the agency's mailroom, copy center, health unit,
and travel center, and who also provide software and systems development
support. In addition, 1,200 off-site contractors augment NSF staff
in realization of the agency's programmatic objectives.

Leadership and Results

NSF's commitment to human capital is articulated in its Human Capital
goal - to prepare a diverse, agile, results-oriented cadre of NSF
knowledge workers committed to enabling the agency's mission and continuously
expanding their capabilities to shape the agency's future.

A. Human Capital Planning Strategy

NSF's approach to strategic workforce planning or succession planning
ensures that the agency has the right people with the right competencies
in the right jobs at the right time. NSF's approach to succession
planning encompasses both the development of critical talent and core
competencies from within, and the identification and recruitment of
strategic talent from the outside. This two-pronged approach allows
the agency to anticipate and meet its staffing needs in the challenging,
dynamic environment that constitutes work at the science and engineering
frontier and ensures that employees are well-prepared to meet agency
challenges in the near- and longer-terms.

The agency considers the following inter-related issues in implementation
of its ongoing workforce planning activity.

Consistent with this approach and as a precursor to the more comprehensive,
forthcoming Business Analysis, in FY'01 NSF conducted an agency-wide
workforce planning exercise that was informed by NSF's future mission-oriented
opportunities and challenges and its increasingly IT-intensive business
processes and practices. Amongst other things, the analysis revealed
the following:

importance of providing a strategically-aligned portfolio of
continuous learning programs to respond to emerging science and
engineering opportunities and challenges, to meet changing nature
of NSF work, and to close identified skill gaps

an increasing investment in the NSF Academy(3)
to develop agency human capital competencies in areas such as project
management, IT and leadership development

the creation of additional science assistant positions to effect
increased efficiencies and to increase effectiveness of program
directors by reducing their more routine processing workload

the strategic recruitment of science and engineering personnel
with expertise to complement talent resident in-house

development of telecommuting and alternative schedule strategies
to optimize quality of worklife and realize productivity improvements

Where appropriate, these priorities are reflected in the agency's FY'03
budget request.

The activities described in B. - E. below are representative of
strategic activities undertaken to support the agency's succession
planning activities.

B. Human Capital Recruitment Strategies

Growing competition from the private sector in attracting and recruiting
staff, especially those with state-of-the-art science, engineering
and IT skills, demands a pro-active outreach and marketing plan. The
agency's plan includes targeted outreach activities to scientists,
engineers and students who are underrepresented in the science and
engineering workforce. The effectiveness of advertising methods, as
well as more direct recruiting, is evaluated on an ongoing basis and
an increased emphasis is being placed on online advertising. And to
improve the efficiency of the hiring process, the agency is now implementing
an e-Recruit pilot that seeks to reduce the current lengthy, paper-intensive
recruitment process.

To meet the needs of the agency's work at the science and engineering
frontier, NSF draws upon current hiring flexibilities to attract a
cadre of temporary scientists and engineers who are leaders in their
respective fields and who join the agency for periods of 1- 3 years.
Using these hiring flexibilities, NSF engages scientists and engineers
who motivate agency innovation in perspective and stimulate investments
that may not occur otherwise.

NSF currently provides a range of strategic learning and career
development programs coordinated via the NSF Academy. These include
a Leadership Development Program, a catalog of in-house courses providing
Technologies and Tools-related and other critical skills training,
an NSF Forum Series, courses available via satellite and distance
learning, information on external courses and programs, a tuition
support program for program support personnel, career counseling and
assessment, and a Learning Resources Center. These activities enhance
the skills of the agency's workforce, build critical competencies
in support of the agency's mission and strategic goals, and groom
future generations of agency leaders.

To meet critical competency needs and to close skill gaps, the agency
is currently conducting an e-learning pilot that combines a Web-based
learning management system and content library with over 1200 online
courses offered by two established e-learning vendors. The agency
acquired 200 licenses for the pilot through interagency agreement
for a period of one year. The pilot has been implemented in stages,
with Business Operations and Science and Engineering staff volunteers
assessing courses for quality, content, relevance to NSF mission and
associated workload demands and ease of use. From November, 2001 through
March 31, 2002, 45 participants took 32 different courses in competency
areas such as financial management, project management, leadership,
management and information technology. In April, 61 new participants
joined the pilot group and the remaining 90 licenses will be offered
NSF-wide in June.

D. Performance-Based Reward Structure

NSF has developed a comprehensive system of awards and incentives
that motivate improved performance, including monetary awards, recognition
ceremonies, time-off awards, awards celebrating collaborative group
achievements, and promotion opportunities. Low performance is rare
in a competitive, high-achieving organization, and the agency uses
current hiring flexibilities to ensure human capital "best fit" within
the organization. When necessary, the agency has used available mechanisms,
including removal, to address unsatisfactory performance.

E. Telecommuting

Longer commutes, increased traffic congestion, and a desire to better
balance work and family needs combine to make telecommuting one of
the work/life programs most desired by employees. A recent NSF study
found that opportunities exist to increase workforce participation
in telecommuting. Both Business Operations and Science and Engineering
personnel represent ideal candidates for telecommuting. Business Operations
personnel spend 30-50 percent of their time performing on-line, structured
administrative duties that do not require face-to-face interaction
with other staff. Science and engineering personnel spend 40-60 percent
of their time on focused activities such as reading, writing, or analyzing
data. The agency is committed to further developing its telecommuting
pilot, recognizing that technology barriers will be increasingly minimized
as the agency moves to an "any time, anywhere" virtual office concept.

*********************

Standards for Success

NSF's future Human Capital investments will be informed by
the agency's Business Analysis and are described within the framework
of the President's Human Capital standards for success.

I. Organizational Alignment

NSF's Business Analysis promises to reveal organizational alignment
opportunities. For example, the impact of a growing budget coupled
with an increasingly complex and multidisciplinary portfolio of science
and engineering research and education priorities may reveal organizational
alignment opportunities that will improve the effectiveness and efficiency
of one or more of the agency's core business processes. Opportunities
revealed will be examined for mission-focused value-added in terms
of quality of results, customer service, and efficiency.

II. Citizen-Centered, Mission-Focused Organizational Structure

NSF's organizational and business structures are designed for efficiency
and effectiveness. Each year, the agency receives approximately 30,000
science and engineering research and education proposals. Through
funding of the best proposals as determined by merit review, NSF promotes
the progress of science and engineering through investments in PEOPLE,
IDEAS and TOOLS.

The agency encourages stakeholder participation in decision-making
and priority setting through its Business Processes (especially
the Merit Review process) and through its community-based advisory
structures. Furthermore, many NSF-supported activities - including
the NSF web site and its public information activities - help to boost
public awareness of science, engineering, and technology and create
a more engaged citizenry.

The Business Analysis may reveal citizen-centered, mission-focused
structural opportunities that have not previously been identified.

III. High-Performing, Learning Organization

NSF Academy: One of NSF's future Human Capital opportunities
is to integrate existing workforce development programs and associated
learning opportunities into a strategically aligned learning system
that supports the agency's performance culture and capitalizes upon
its technology-enabled business environment. This will be accomplished
through the NSF Academy.

In its full implementation, the NSF Academy will create and integrate
innovative Human Capital learning opportunities aligned with
the agency's Strategic Plan, supporting its Business Processes
and leveraging its Technologies and Tools. Working in concert
with learning partners in the public and private sectors, the NSF
Academy will provide a comprehensive suite of organization and career-enhancing
programs. Pedagogies will merge theory with practice, knowledge with
experience, and will facilitate cross-functional, team-oriented and
individual learning experiences that focus on contemporary organizational
challenges.

Leadership and succession planning will be built into the skill
development curriculum providing all employees the opportunity to
gain the skills and knowledge necessary to compete for leadership
and management roles.

Specific activities to be undertaken include:

Align current workforce training programs with the agency's critical
Business Processes

Design and implement career "mapping" tools that align individual
and organizational goals, contribute to the agency's succession
planning and include opportunities for job rotations, details and
other developmental assignments

Capitalize on e-Learning opportunities and their promise for
enhanced performance by further developing the current e-learning
pilot - new online NSF business system tutorials developed and introduced
in FY'02 will establish structure and standards for future additions
and enhancements.

Leadership and Succession Planning: NSF will continue to
refine and improve its succession planning process for identifying,
assessing, developing and retaining talent to ensure leadership continuity
in all positions within the agency. Specific activities to be undertaken
include:

Embedding leadership development opportunities in all NSF Academy
curricula. (A leadership competency analysis is being carried out
in FY'02 (see IV. below) to identify skills required for leadership
roles at NSF.)

Developing an improved leadership and succession planning process
that is closely linked with initiatives made available through the
NSF Academy and with strategic recruitment and retention initiatives.

IV. Assess Workforce Skill Gaps/Deficiencies

NSF's Business Analysis will facilitate the integration of the agency's
human capital strategies with its strategic and programmatic planning
- to identify workforce size, skill mix and deployment necessary to
ensure mission accomplishment. In defining its current Human Capital
environment, the agency will document its workforce competency/skill-mix
baseline. It will also examine attrition trends and quantify potential
workforce attrition through retirement over the next five years.

During and following a high-level, future-looking analysis of the
core Business Processes, NSF will identify its future workforce
requirements, including knowledge, skills, and competencies necessary
to realize core Business Process scenarios.

The agency will carry out a gap analysis that identifies new human
capital competency/skill requirements, and strategies will be identified
and implemented to recruit, retain, and develop (through the NSF Academy)
employees to meet these future organizational needs. Recruitment strategies
will capitalize on the agency's current hiring flexibilities and will
identify additional desriable flexibilities.

As part of the Business Analysis, NSF will define a new Occupation
Classification System to support its competency-based human capital
management approach. This system will include the definition of new
positions that result from the competency development and analysis.
Strategies to migrate from the present KSA-based system to a competency-based
alternative will be developed and implemented. In the process, positions
with competitive sourcing potential will be identified.

V. Merit-Based Rewards

NSF will modernize its incentive and reward system to sustain and
invigorate the agency's performance culture. The resulting system
will comply with standards for internal accountability and will incorporate
compensation and reward approaches built on objective and dynamic
market criteria determined by marketplace studies. The agency is commited
to deploying a compensation and reward system that provides flexibility
to competitively compensate/reward individuals and teams for their
mission-essential skills and competencies, as well as their overall
contribution to the organization.

VI. Workforce Skill Mix for eGovernment and Competitive Sourcing

As described in IV. above, NSF will identify a comprehensive
set of competencies and skills critical to its future success. The
Business Analysis will identify workforce competencies that support
and enable the agency's critical Business Processes, and its eGovernment
competitive sourcing, financial management and budget and performance
integration initiatives.

President's Management Agenda
Expanding Electronic Government

Leadership and Results

NSF was one of the founders of the Federal Commons initiative and
remains committed to the new Government-wide eGrants Initiative. The
agency will be a partner on the eGrants team led by Department of
Health and Human Services and already works closely with the National
Institutes of Health in the development of electronic systems supporting
grants processes for the science and engineering research and education
community. While other agencies plan for electronic grant submissions,
in October 2000, NSF started conducting virtually all business interactions
and transactions electronically with its customers, the grantee community,
through its new FastLane system.

The FastLane system exemplifies what can be achieved in eGovernment
information system design, development and implementation. Over 200,000
scientists, engineers, educators, technology experts and academic
administrators use FastLane's web-based system to submit proposals
for funding, peer-review these proposals and report on the progress
of their NSF-funded projects. Universities and other organizations
request funding increments and report on billions of dollars in expenditures
through this system. In addition, the public can access titles, authors,
funding amounts and abstracts of NSF awards.

The results of NSF's eGovernment initiatives are significant. In
FY'01, NSF received and processed more than:

30,000 Electronic Proposals (over 99% of all proposals-see
figure)

130,000 Electronic Reviews

6,000 Electronic Graduate Research Fellowship applications

21,000 Electronic Grantee Progress Reports

7,000 Electronic Post-Award Actions

13,000 Electronic Requests

$2.7 Billion Distribution of Funds

In June 2001, NSF implemented electronic signatures for proposals
(so far over 20,000 electronic signatures have been collected, saving
grantees over $150,000 in express mail costs). By the end of FY'01,
the agency had completed ten paperless processing pilots.

NSF has also contributed time and resources to develop a significant
part of the Federal Commons, the Government-wide grants portal, and
remains active in supporting the eGrants initiative approved by the
President's Management Council. For example, NSF created a generic
Federal grants web prototype for use by all Federal grant-making agencies
as part of the Federal Commons. Turned over to the Federal Commons
in October 2001, the web-based grant submission program uses XML to
transmit the submitted data to Federal agencies and other participants.
NSF will continue to commit its expertise, experience, and technologies
to the inter-agency eGrants initiative.

Plans for Next Generation Capability

The agency's Business Analysis will serve as the driver for implementing
its next generation eGovernment capability. This multi-year effort
will guide all future technology investments and provide the overarching
framework for assuring that technology optimizes business value and
mission performance.

A. NSF Enterprise Architecture

NSF will follow a disciplined approach for assuring that new investments
are planned and evaluated within the context of an overall Enterprise
Architecture framework. This approach will be consistent with, and
complementary to, the Business Analysis described earlier in this
Plan. The NSF Integrated Enterprise Architecture will: (1) provide
a blueprint for defining current business processes, applications,
information resources, and technical infrastructure; (2) support definition
of the knowledge bases, applications, and supporting technology that
are needed to support evolving NSF mission needs; and (3) define a
crisp transition strategy and plan for achieving an integrated Enterprise
Architecture that is consistent with NSF business goals and operational
priorities.

Development and evolution of the NSF Enterprise Architecture will
mirror the phased approach and timeline for the Business Analysis.
As part of the activity to "Refine the Overall Strategic Framework,"
and subsequent Business Analysis for core processes, NSF will complete
the following:

Define the current architecture at a high level, focusing on
current business processes and information flows; existing applications
and systems; and the supporting technology infrastructure.

Define an initial target architecture that reflects NSF's assessment
of future opportunities and needs for new knowledge bases, applications,
and technologies needed to enable evolving business processes.

Develop an initial migration strategy to guide the sequence of
activities to achieve the target architecture.

As changes to business processes and requirements are made in later
phases of the Business Analysis, the Enterprise Architecture and migration
strategy will be updated to assure it reflects evolving business and
operational priorities.

B. Implement Next Generation eGovernment Capabilities

NSF's phased approach for implementing next generation eGovernment
capabilities will result in delivery of high priority technologies
and capabilities to assure NSF's management excellence

Core Processes: Merit Review and Award Management and Oversight
NSF's first phase of implementing next generation eGovernment capabilities
will focus on two core business processes: Merit Review and Award
Management and Oversight. Based on the focused Business Analysis performed
in these two areas, NSF will answer the following questions:

What information is needed to support the Business Process?

What applications are needed to provide the information?

What technology is needed to support the applications?

What is needed to assure data quality and consistency?

Initial planning to enable the Merit Review and Award Management
and Oversight processes has been completed and is reflected in the
FY'03 Exhibit 300, Capital Plan for a new initiative called the Proposal,
Review, and Awards Management Integration System (PRAMIS). PRAMIS
will improve internal NSF processing as a complement and extension
to the common processes and products planned for the Government-wide
eGrants initiative and Federal Commons, focusing on integration and
improvement of internal, back office NSF functions. As with Fastlane,
NSF will assure that internal business process improvements and IT
capabilities are integrated with Government-wide eGrants initiatives
to streamline and simplify electronic grants management across the
Government.

To mitigate project risk, NSF is adopting a phased approach for
PRAMIS. Phase I is planning and definition; Phase II involves acquisition
and implementation. Phase I plans call for the formulation of a baseline
assessment and initial business case; establishment of an integrated
project team; completion of the Business Analysis and functional requirements
definition; and completion of technical alternatives study, security,
privacy and return on investment analyses. Based on the business case(s)
and priorities established, a phased, modular acquisition of high
priority capabilities, consistent with Federal guidelines and the
NSF Enterprise Architecture, will be initiated. When complete, NSF
will be able to support the Merit Review and Award Management and
Oversight processes with an integrated suite of systems and streamlined,
technology-enabled business processes in place of current standalone,
stovepipe applications. In addition, this system will seamlessly interface
with and extend current capabilities of the inter-agency eGrants initiative.

Core Processes: Resource Allocation, Performance Assessment
and Accountability, and Knowledge Management
Subsequent phases of requirements and plans for enabling capabilities
will be defined as part of the Business Analysis for remaining core
processes, and will generally follow the disciplined approach highlighted
below:

Define information, applications, and technology needed to support
the business process

Analyze alternatives with priority given to market-based solutions,
where feasible, and incorporation of best practices

Establish business case, investment plan, and migration strategy
for decision-making

Implement pilots and prototypes for proof of concept

Acquire and implement needed capabilities

Make necessary upgrades or updates to NSF Enterprise Architecture.

The result of this multi-year approach will be phased implementation
of technology needed to enable critical business processes consistent
with NSF priorities and available resources.

C. Productivity Improvements

NSF has a solid track record of obtaining productivity improvements
through the use of management and technology innovations, evidenced
by the historically low ratio of administrative and management overhead
required to manage over $4 billion in science and engineering research
and education grants. As part of NSF's phased approach for implementing
next generation eGovernment capabilities, opportunities for improving
productivity for common functions will be addressed. Highlights of
the current status and plans in key areas included within the President's
Management Agenda are:

Knowledge Management - The Foundation continues to advance
discovery while taking steps to promote the dissemination, integration,
and application of new knowledge. NSF continues to invest in web-based
capabilities for disseminating information about research and education
opportunities, reviewing an annual workload of 30,000 competitive
proposals, and communicating results broadly. NSF's Knowledge Management
goals are to provide contextually appropriate information to the people
who need it when they need it; locate best practices and expertise;
enable sharing and collaboration; and ensure individual knowledge
is captured in a repository of organizational knowledge. Four projects
will be implemented to support aspects of Knowledge Management:

Human Capital Knowledge Bases - As part of our Human Capital
initiative, NSF will implement a number of pilots to support workforce
management requirements. For example, knowledge bases in support
of the NSF Academy will be developed to support the Agency's vision
to grow as a learning organization. In addition, web-based learning
systems and other innovative learning delivery methods will equip
personnel with the skills necessary to ensure the effective use
of NSF's electronic business systems. Other knowledge bases to support
workforce assessments and competency requirements will also be piloted.

Program Information Management System (PIMS) -- PIMS will
consolidate NSF's program information into a single comprehensive
database that can be used flexibly for searching, for preparing
outputs of program information (e.g., the Guide to Programs, NSF
program announcements, NSF web sites), and for providing data to
other NSF automated systems. PIMS will allow program officers to
update information about their programs in one single application.
PIMS will provide authoritative information about NSF programs.

Final Project Report Knowledge Base -- Every year, thousands
of Principal Investigators submit final project reports that capture
the results of their NSF-funded projects. Because these reports
are rich in information, NSF will implement a capability to allow
scientists and engineers to "mine" the reports for numerous purposes
(e.g., find expertise in specific fields of science and engineering
to support Merit Review processes). The knowledge base can provide
a wealth of information about NSF funding and areas of concentration,
spark new ideas for new research and education directions, and provide
a critically needed final reports historical archive.

Committee of Visitors Information Repository -- Each year,
NSF conducts formal evaluations of its programs using Committees
of Visitors. These committees review approximately one-third of
NSF's programs each year. The results of the Committees of Visitors
reviews are used for a variety of purposes, including being a significant
part of the GPRA reporting process. This knowledge base will provide
synthesized information useful to these groups in their evaluation
of NSF programs.

Customer Relationship Management (CRM) - NSF currently supports
over 200,000 external customers from institutions using FastLane,
logging over 4,500 calls a month for customer care and services. This
is in addition to the 2,500 calls a month supported within the Foundation
by other personnel. A strategic priority for FY'02 is the "Customer
Care" initiative that seeks to significantly improve customer relationships
and service delivery, including implementation of commercial CRM software
and telephone integration. Functions to be supported include improved
customer contact, helpdesk management, web self-service, skills-based
routing, customized business logic automation, and a rich knowledge
base of information. Initial implementation will be completed in FY'02,
resulting in a significantly improved capability to support NSF's
science and engineering customer base. In FY'03 and beyond, NSF will
continue to assess the feasibility of extending the CRM software into
other customer support functions (e.g., NSF Information Center), and
implement, where appropriate.

Enterprise Resource Management - In FY'01, NSF successfully
implemented a new Financial Accounting System and Integrated Payroll
System. It is anticipated that these systems will remain in an operations
and maintenance status for the next five to seven years. NSF does
plan, however, to evaluate Enterprise Resource Management commercial
products as legacy administrative systems (e.g., human resources management,
procurement, travel) are scheduled for modernization or enhancements.
More intuitive, user-friendly systems that provide more robust functionality
will allow permanent staff as well as the many temporary rotators
to focus their efforts on problem resolution rather than routine,
repetitive administrative activities.

Anytime, Anywhere Access/Remote Access - Advances in information
technology, the Internet, and computing devices provide the means
for an "any time, anywhere" office concept. Access and security will
become increasingly vital in providing the type of virtual office
that NSF staff and customers require. NSF will continue to invest
in current and emerging technologies to support evolving work approaches
and requirements. Planned initiatives include:

Remote Access - This initiative is principally aimed at
providing secure remote access to address the increasing need to
accommodate remote staff, remote merit review panels, and collaborative,
work teams. NSF will experiment with new technologies or new ways
of integrating existing technologies to respond to the growing need
for collaboration and mobility. Actions include pilots, technology
assessments, and acquisition and implementation of capabilities
consistent with requirements and the NSF Enterprise Architecture.

Telecommuting - In support of the President's telecommuting
goals, NSF is committed to broadening access and interoperability
by investing in innovative communication infrastructure technologies
expanding secure remote computing and communication capabilities
of NSF's workforce. Implementation of this initiative will ensure
user-friendly, secure remote access to NSF assets and resources
to meet evolving workforce requirements. Telecommuting is critical
for distance workers at remote locations in the field, on travel,
on campus, and is an important recruiting tool for a next generation
workforce.

Wireless technology - NSF will continue to assess, pilot,
and implement wireless technology and devices, such as hand-held
computers and wireless laptops, to improve efficiency, productivity,
and customer service. This new technology will allow for easy remote
checking of e-mail, Internet access, and communication to NSF systems.

NSF's videoconferencing program - In the past few years,
videoconferencing at NSF has become a business tool for a variety
of uses, and it is anticipated that it will continue to play an
increasing role at the Foundation. Uses include panel meetings,
job interviews, staff meetings with remote staff and contractors,
meetings with Principal Investigators, Advisory Committee meetings,
National Science Board meetings, and training. As travel becomes
more expensive and inconvenient, as the use of Internet-based videoconferencing
grows, and as telecommuting increases, there will be a greater need
for this method of providing "virtual" access to a "virtual" office.

D. Other eGovernment Initiatives

Information Technology Security - NSF is focused on assuring
that infrastructure and critical assets are appropriately protected
while maintaining an open and collaborative environment for science
and engineering research and education. The agency has established
a strong and comprehensive Information Technology Security (ITS) program
that is consistent with Government-wide guidance and is patterned
after industry best practices.

The majority of NSF's significant information technology assets
are managed within the Office of Information and Resource Management,
which serves as the organizational focus of the ITS program. OIRM
administers NSF's sophisticated technological infrastructure, providing
the hardware, software and support systems necessary to manage the
Foundation's grant-making process and to maintain advanced financial
and accounting systems. The NSF Chief Information Officer (CIO) provides
overall leadership for the ITS program, and ensures that policy, procedures,
and activities are coordinated among OIRM Divisions and other NSF
program management initiatives.

NSF's information security approach is based on a fundamental philosophy
of risk management where ITS risks are assessed, understood, and appropriately
mitigated. This approach allows NSF to implement suitable layers of
protective measures and controls to ensure the privacy, integrity,
and security of information and information technology resources needed
by NSF and the broader research and education community while allowing
appropriate access and availability to users. This layered approach
effectively reduces the risk of unauthorized access to systems and
information using various manual and automated checkpoints and controls.

NSF's comprehensive ITS program encompasses all aspects of information
security, including policy and procedures, risk assessments and security
plans, managed intrusion detection services, vulnerability assessments,
and technical and management security controls. While much has been
accomplished, the ITS program must evolve to meet inevitable threats
to NSF assets and resources. NSF is responding to ITS vulnerabilities
identified in the FY'01 audit process, which will improve the agency's
overall information technology security posture. The vulnerabilities
and associated recommendations addressed application security design,
data base security, intrusion detection, network infrastructure security,
file-sharing and remote access, access to application source code,
physical access, and administration of systems and facility access
privileges. Corrective action has been taken to minimize or eliminate
these vulnerabilities and where appropriate, additional procedures
will be implemented during FY'02 and FY'03 to limit the possibility
of similar vulnerabilities occurring in the future. NSF will continue
to identify areas where ITS improvements are appropriate, and to identify
steps that can be taken to reasonably address areas of significant
risk.

In FY'03, NSF plans to initiate projects to use multi-technology
such as smart cards and a public key infrastructure to ensure more
efficient physical and logical security. By using multi-technology
cards, employee identification and passwords can be initiated and
deleted in a "one stop shopping" methodology. The agency will also
assess and implement more sophisticated security, authentication,
and access capabilities such as digital signatures and the use of
public key infrastructure.

The National Science Foundation remains committed to providing a
reliable and secure information technology infrastructure. During
FY'02 and beyond, the continued improvement of the ITS program is
an agency priority.

Government Paperwork Elimination Act (GPEA) -NSF is committed
to meeting the Government-wide deadline for providing electronic alternatives
for transactions with the public, business, and other governments.
As requested, NSF has re-evaluated GPEA schedules and has accelerated
conversion plans for one initiative that did not initially meet the
October 2003 Government-wide deadline. As soon as possible in 2003,
but no later than October 2003, the last of the honorary awards will
be implemented in the electronic environment.

*********************

Standards for Success

In addition to the plans described in the preceding section, the
agency is addressing the core criteria described in the President's
scorecard standards for success in the following ways:

I. Strategic Value

NSF has two major system investments requested for funding as part
of the FY'03 budget. These are the Financial Accounting and Payroll
System, which are in an operations/maintenance phase, and the new
Integrated Proposal, Review, and Awards Management Integration System
which is a new initiative starting in FY'02. As required in OMB Circular
A-11, both initiatives are identified in the FY'03 Information Technology
Investment Portfolio (Exhibit 53) and in FY'03 Capital Plans (Exhibit
300). NSF will develop business cases (i.e., Capital Plans) for all
major system investments identified as part of the Business Analysis.
These plans and all other required information related to information
technology investments will be submitted as requested in future budget
processes.

II. IT Program Performance

Major IT projects are consistently operating within 90 percent of
submitted Capital Plan (Exhibit 300) cost, schedule, and performance
targets. In the area of IT reform, NSF continues to execute its formal
IT investment planning process incorporating the requirements of the
Clinger-Cohen Act and other applicable laws, regulations, and guidelines.
Two key groups, an internal CIO Advisory Group, and a new external
Business and Operations advisory group comprised of executive leaders
from government, industry, and academia, provide oversight and advice
on NSF's IT plans and operations and assure overall IT management
performance and results. NSF is also implementing more rigorous internal
reviews consistent with industry and other Government best practices
of all IT investments and projects (significant and small) to improve
cost, schedule, and performance results.

As described earlier, evolving the NSF Enterprise Architecture is
a strategic priority for NSF to assure that it supports changing business
practices and priorities, funding decisions, and technology advances.
NSF is committed to an Enterprise Architecture framework that supports
more effective investments in information technology, evolving strategic
and tactical business priorities, and its value as a living blueprint
for systems and business migration.

III. Citizen One-Stop Service Delivery

NSF will continue to focus on meeting citizen one-stop service delivery
goals. Two areas of focus for NSF are:

Government-wide Portals - NSF provides information to
citizens by applying automated procedures for displaying announcements
of grants funding opportunities through the interagency FedBizOpps.gov
site. NSF developed a Java client that can select NSF funding information
from the agency's electronic systems and sends it to the centralized
FedBizOpps for automatic posting, through XML, onto the interagency
web site. NSF participates in Interagency Edison, collaborates closely
with NIH in developing grant submission applications, appears prominently
in Firstgov.gov, and developed elements for the Federal Commons
portal. NSF is active in the Inter-Agency Electronic Grants Committee
(IAEGC), developed a web-based grid portal to consolidate access
to advanced computing systems, and for the last seven years has
operated the FinanceNet financial management web portal.

The Digital Government - NSF runs a Digital Government
research and education program that, among other things, improved
citizen access to government statistical data, managed information
and knowledge for law enforcement, implemented a testbed of high-speed
communications for comprehensive emergency management, and is ensuring
security for web-based statistical analysis of confidential data.
As part of this program, NSF developed a partnership, known as "dg.o"
(DigitalGovernment.Org), that partners computer scientists and federal,
state and local agencies to improve the quality and scope of on-line
government services. The dg.o consortium will support participating
research and education institutions and the digital government community
by giving researchers insight into federal agency needs, transferring
emergent information technology from academia to member agencies,
acting as an information source across agencies, and helping to
leverage resources through collaboration.

IV. Minimizing Burden, Using ebXML and Other Open Standards

NSF remains committed to minimizing burden on the public by using
ebXML and other open standards. Initiatives in this area are:

FastLane Data Collection (FY'94 to present) - The NSF
FastLane system significantly reduces the burden on our grantees
by storing their profiles for re-use every time they submit a proposal.
This is true for both individuals and organizations. This process
means that the information (e.g. full name, contact information,
academic degree and demographic information for individuals) is
entered into the system only once, although it can be updated at
any time. In addition, past proposal submissions, budgets, progress
reports, requests and other submissions are accessible by users
and may be edited or updated, as required, for future submissions.
This also reduces the workload of administrators, scientists, engineers,
educators and grant writers. Approximately 220,000 individual profiles
and 5,000 organization profiles are stored in FastLane.

EDI/XML Submissions (FY'01 to FY'03) - NSF worked closely
with grantees to become the first Federal grant-making agency to
accept Electronic Data Interchange (EDI) data streams, using the
Federal EDI 4010 transaction set, for proposal submissions from
customers. NSF is planning a process that will also accept XML data
streams, based upon the data dictionary developed by the Federal
Commons. In addition, as a leader in using open standards to receive
transmissions from our customers, the agency developed a web-based
system for Federal Commons that, when implemented, will enable the
data to be sent as XML data streams to participating agencies.

Electronic External Data Exchanges (FY'03 and beyond)
- As NSF expands the number of information technology systems to
support its mission and business activities, an increasing number
of these systems will be dependent on data that come from external
data sources. Some examples of this are zip codes from the U.S.
Postal Service, Congressional districts from the Census Bureau,
and DUNS numbers from Dun and Bradstreet. Keeping these data current
is a manual process requiring hundreds of staff hours each year.
By creating electronic data exchange with these data sources, NSF
will reduce the burden on its staff to keep the data current, thereby
improving data quality.

NSF has partnered with the Federal Commons and plans to continue
to be active in interagency electronic grant efforts through the eGrants
initiative. NSF enthusiastically brings to eGrants the expertise,
experience and substantial accomplishments of an organization that
has completely implemented electronic grants.

President's Management Agenda
Competitive Sourcing

For many years NSF has capitalized on the potential of competitive
sourcing to achieve its mission. While the agency is comparatively
small and has a federal workforce of only about 1,300, many times
that number are involved each year in realizing the agency's goals.

Leadership and Results

NSF's most fundamental role is to select and oversee a wide range
of competitively sourced science and engineering research and education
projects.

Nearly 200,000 people are directly supported through NSF grants,
awards and related activities, receiving salaries, stipends, or
participant support. This includes over 25,000 senior researchers
and educators, almost 25,000 graduate students, and almost 100,000
K-12 teachers and students.

These grants and awards are awarded through a competitive merit
review process; each year, more than 50,000 volunteer, non-federal
reviewers take part in the merit review process and in oversight
review of ongoing awards.

In addition, each year, approximately 130 scientists, engineers
and educators come to NSF through the Intergovernmental Personnel
Act for periods of 1 - 3 years to work with permanent staff in managing
the agency's programmatic activities and 1,200 contractors are supported
through competitive contracting methods, and augment NSF staff to
realize programmatic objectives.

NSF has already competitively sourced its commercial administrative
functions, including its mailroom, copy center, health unit, travel
center, and much of its software and systems development, bringing
the total for contractor personnel to 1,400. A high level of competitively
sourced commercial activities over the years has enabled NSF to focus
its small workforce on its core business needs and mission-essential
functions. Due in part to its forward-looking and highly effective
implementation of competitive sourcing, although NSF's budget has
increased by more than 80 percent in the past ten years, the number
of NSF federal employees has increased by only 1 percent -see below.

Standards for Success

NSF supports the President's Management Agenda to competitively
source commercial non-governmental activities. And, consistent with
other core considerations in the Agenda, the agency seeks to ensure
that human capital decisions are strategically driven and support
the agency's mission and goals. Improved performance and results thus
serve as the drivers for competitive sourcing decisions.

I. Public-Private or Direct Conversion Competition

In FY'00, NSF's Federal Activities Inventory Reform (FAIR) Act Inventory
identified 533 FTE as subject to competitive sourcing. Since FY'00
however, the nature of many of these positions has changed, due in
large measure to NSF's rapidly evolving, technology-enabled business
environment. Furthermore, as the agency begins a Business Analysis
and migration toward a competency-based occupation classification
system that may redefine all NSF positions, NSF's FY'00 FAIR Act inventory
will become increasingly obsolete.

Consequently, the agency plans to draw upon its Business Analysis
to redefine its FAIR Act inventory. This will place the agency in
a strong position to develop a strategic competitive sourcing plan
that optimally supports its future business needs. Development of
this plan will begin in FY'03.

II. Approved Competition Plan

In FY'02 the agency will initiate a comprehensive Business Analysis
to help determine A&M investments for the foreseeable future. Outputs
of the analysis will include:

The Analysis will provide NSF with a comprehensive framework for
its next-generation workforce, including a strategic, mission-oriented
plan for competitive sourcing. NSF is committed to maintaining a small,
efficient, agile workforce focused on realizing its mission and goals.
While fewer federal employees may be needed to perform commercial
activities, more employees with different skills may be needed to
maintain core capabilities and manage contractors' performance. Through
strategic competitive sourcing, NSF can effectively leverage the inherently
governmental roles of policy and decision-making with the resources
and expertise of the private sector.

III. Inter-Agency Commercial Support

NSF does not believe that this standard is relevant to its business.
However if, in the course of refreshing legacy systems [e.g., payroll,
personnel] any agency cross servicing options are identified, these
will be considered on an appropriate competitive basis. NSF will also
review its small inventory of Inter-Service Support Agreements to
confirm that it is in compliance.

President's Management Agenda
Improved Financial Performance

NSF's ability to embrace change and move forward quickly with implementation
strategies has been key to NSF's financial management performance
success, where a focus on both current requirements and future opportunities
drive innovation.

Leadership and Results

NSF has successfully automated the "back-office" business of processing
financial transactions. Harnessing the power of the Internet, the
agency has developed a "direct business model" of business operations
analogous to high performing private sector corporations which allows
direct contact with customers in real-time.

During FY'01, NSF was able to accept, reconcile, and process over
$3.2 billion or 99.7% of all grant expenditures transactions via the
Internet with direct integration to the agency's financial management
system. NSF activities in this area may be adopted in the eGrants
activity of the eGovernment initiative.

In FY'01, NSF received an unqualified opinion on its financial condition,
providing a solid foundation for a discussion of agency performance
and strategic investments in PEOPLE, IDEAS, and TOOLS. A new finance
and payroll system was integrated into NSF's enterprise architecture
successfully and seamlessly. And the agency continues to provide timely,
accurate, and integrated financial and non-financial systems.

Plans for Next Generation Capability

NSF will continue to raise performance standards to ensure more
effective and efficient operations through innovations that promise
continued results-oriented progress.

A. Erroneous Payments.

NSF's fiduciary responsibility is to ensure that taxpayer funds
entrusted to the agency are properly controlled and disbursed. NSF's
goal has always been to make payments to the correct recipient, in
the correct amount, each and every time. Consequently, the agency
has a culture of high operating efficiencies and sophisticated systems,
which result in very few improper payments.

The General Accounting Office (GAO) recently issued executive guidance
(GAO-02-69G), which outlines strategies for agencies to effectively
manage improper payments. NSF has already adopted many of these strategies
in internal controls integrated into daily business functions.

Since all NSF payment functions are centrally located, NSF conducts
a pre-payment review of all payments, which minimizes the number of
improper payments. The agency has also begun a review of payment processes
through a statistical sample of all payments. The review will be complete
in April 2002 and reported to OMB in May 2002. Additionally, NSF developed
a tracking system for documenting and correcting in real-time those
rare erroneous payments revealed during daily business activities.

NSF's goal is to reduce improper payments to a zero tolerance level.
With current systems augmented by systems currently under development,
this goal is very attainable. Currently, NSF is developing an automated
accounts payable module to its financial system with paperless invoices
and electronic receiving reports. This new process will electronically
track the status of all payments, provide for electronic approvals,
and process payments through Treasury utilizing strong system controls
to ensure that payments are processed on time, in the correct amount,
and to the proper vendor.

B. Increase Grant Monitoring

NSF has taken steps to increase award monitoring activities, paying
particular attention to post-award reviews generally, developing and
applying a risk assessment methodology, and developing tools to conduct
on-site reviews. These steps build on many existing controls in place
in the agency's pre-award environment.

The following initiatives support the agency's emphasis on effective
grant monitoring:

Large Facility Projects Management and Oversight: In FY'01,
NSF completed its Large Facility Projects Management and Oversight
Plan, which outlines NSF's goals and strategies for integrating its
current procedures and processes into a next-generation system for
selecting, managing and overseeing large facility projects. In FY'02,
NSF proceeded with implementation of this Plan. A Large Facility Projects
Guidelines and Procedures Manual is currently being developed, the
personnel selection process for the Deputy, Large Facility Projects
is drawing to a close, and specialized tools to be used in the conduct
of Total Business System Reviews (TBSR) have been developed. Furthermore,
a pilot TBSR has been completed using these specialized monitoring
tools at the National Center for Atmospheric Research (NCAR).

Post-Award Management: NSF has strengthened procedures for
monitoring awardees' administrative and financial management practices
and compliance with laws and regulations.

Risk Plan - The agency has developed a draft risk plan that defines
broad risk factors and includes a more specific matrix of weighted
factors. This matrix provides the algorithms for describing relative
risk across the non-facilities awards universe. The draft includes
a standard award review protocol that describes both pre-award desk
reviews and on-site monitoring review activities, and the standard
information that will be documented for each on-site visit.

Benchmarking - NSF's approach to post-award management is informed
by best practices established in other organizations. To this end,
NSF benchmarked the post-award monitoring activities of other federal
grants-making agencies and subsequently modified monitoring tools
to incorporate best practices.

Developing Critical Competencies - The agency has procured the
services of a training firm to develop a customized course on post-award
monitoring. This course is offered through the NSF Academy, with
the curriculum focused on integrated programmatic and administrative
activities across the awards management continuum.

On-site Grant Monitoring - A risk-based, on-site grant monitoring
methodology has been designed to supplement the agency's current
awards management system, which includes a substantial financial
and administrative monitoring component including the submission
of financial status reports throughout the award lifecycle. A pilot
program of on-site monitoring visits is currently being conducted.
This pilot is designed to test the agency's proposed site visit
methodology, tools, and site visit report format and will consist
of a minimum of 15 visits to be completed by September 30, 2002.
The risk assessment methodology employed to develop the agency's
on-site monitoring plan is an extension of existing agency protocols.
The awards management continuum and the internal controls that safeguard
Federal funds is a thoroughly documented business system. In addition,
the business rules and internal controls that are programmed into
the automated award system implement these official NSF policies
and procedures and document each transaction, by institution and
award.

Property-Reporting Requirements - The agency has developed effective
monitoring tools for government-owned equipment in the custody of
awardee institutions responsible for large research and education
awards and projects to ensure compliance with property reporting
requirements.

C. Financial Management Systems Security

NSF remains committed to providing a reliable and secure information
technology structure for financial information. The agency will continue
to expand and refine the program to provide even better safeguards
for the future. NSF will continue to address this in its ITS program
described in the Expanding Electronic Government section of this Plan.

*********************

Standards for Success

In addition to the plans described in the preceeding section, the
agency is addressing the core criteria described in the President's
scorecard standards for success in the following ways:

NSF's financial management systems have met federal financial management
system requirements and applicable federal accounting and transactions
standards since 1996. The agency will build upon its current best
practices to meet the requirements of quarterly financial statement
compilation and reporting along with continuing to provide real-time
financial information for effective decision support. NSF is planning
for future expansion of electronic transaction processing in areas
such as an electronic travel system.

II. Accurate and Timely Financial Information

OMB Bulletin 01-09 "Form and Content of Agency Financial Statements"
dated September 25, 2001, instituted 5 significant reporting changes:
Accelerated Reporting, Interim Reporting, Comparative Reporting, Budget
Integration and Integrated Reporting. While the agency has implemented
comparative reporting since FY'00 when it was incorporated in the
FY'00 Accountability Report, the agency is taking the following steps
to meet the additional requirements.

NSF considers accelerated and integrated reporting as one effort.
The agency has developed detailed plans that are being implemented
to meet the accelerated FY'03 and future deadline for a combined Performance
and Accountability Report. Plans focus on revising the agency's GPRA
reporting process and structure and revising financial statement preparation
and audit dates. NSF is also working to automate the closing of its
books and financial statement compilation to provide interim financial
reporting. In the past, NSF has prepared interim reports but the agency
is now undertaking a more systematic methodology to meet interim reporting
necessary (semiannual, quarterly or monthly). NSF will send OMB a
joint NSF CFO and OIG schedule that describes how the agency will
meet the new reporting dates.

NSF additionally participates on the CFO Council Accelerated Financial
Statement Reporting Committee to keep abreast of and to provide active
input on this issue.

NSF's financial system has the capability to provide full project
cost information to decision-makers. The system provides the ability
to record and capture information for cost identification fields called
program reference codes. These program reference codes function as
project codes, allowing the financial system to track and maintain
full cost data at the project level. Additionally, NSF's financial
system has recently been enhanced and now allows NSF staff to query
cost information at various levels.

The agency's Executive Information System (EIS) provides transactional
data as well as summary information on performance indicators, which
are utilized by NSF staff to support decision-making. In addition,
NSF is working with consultants to help further refine processes that
merge financial (cost) and performance information.

IV. Unqualified and Timely Audit Opinion on the Annual Financial
Statements; No Material Internal Control Weaknesses Reported by the
Auditors

NSF has submitted annual audited financial statements and audit
opinion within prescribed deadlines since 1996. The agency has received
an unqualified opinion on those financial statements since 1998. NSF
is committed to realizing a submission of unqualified and timely audit
opinions within the deadline of February 1 for fiscal year 2002 and
earlier dates beginning in fiscal year 2004. With its highly automated
and agile financial systems, NSF is well positioned to meet all required
deadlines.

In addition, NSF has not had a material weakness in internal controls
since 1998. The agency is proactively addressing all FY '01 audit
findings, and is dedicated to the effective mitigation of material
weaknesses in internal controls in fiscal year 2002 and beyond.

President's Management Agenda
Budget and Performance Integration

Since enactment of the Government Performance and Results Act of
1993 (GPRA) and the Chief Financial Officers Act of 1990, NSF has
integrated budget request and performance information. The agency's
results-centric approach to long-range planning and budget development
has focused attention on strategic outcome goals and mission-responsiveness.

Leadership and Results

A. Approach to Budget and Performance Integration

NSF's long-range planning and budget activities are distributed
throughout the agency's program Directorates and Offices, with coordination
activities centralized within the Office of Budget, Finance and Award
Management (BFA) and the Office of Information and Resources Management
(OIRM). Responsibility for development, coordination and innovation
in GPRA activities reside with a team of four senior NSF managers
- the agency's GPRA Infrastructure Implementation Council (GIIC) -
who report directly to the agency's Chief Operating Officer. Currently,
the GIIC Chair is the agency's Chief Financial Officer; other GIIC
principals include the Chief Information Officer, the Director of
NSF's Office of Integrative Activities, and the Senior Associate,
Strategy, Policy and Planning from the Office of the Director. GIIC
is assisted by a working group (WG) composed of key staff from the
program Directorates and Offices, BFA and the Budget Division and
OIRM, many of whom are also members of the agency's Budget Planning
Liaison Group.

The agency's annual Budget Request and its annual GPRA Performance
Plan provide an agency-wide picture of program and management activities
planned for a given year within the context of the agency's Strategic
Plan. In consultation with the agency's senior managers in the program
Directorates and Offices, GIIC and the GIIC WG coordinate preparation
of the annual performance plan which is developed in concert with
the agency's Budget Request. GIIC and GIIC WG members ensure that
the Budget Request and the GPRA Performance Plan reflect the annual
set of agency-wide strategic outcome and management goals.

External experts convened as Committees of Visitors and Advisory
Committees assess the effectiveness of resulting outcomes derived
from the agency's investments in PEOPLE, IDEAS and TOOLS. Issues highlighted
by these groups facilitate the identification of emerging common themes,
and catalyze discussion of research and education needs and special
opportunities. Issues identified are discussed by senior managment
and the resulting iterations of evaluation, planning and budgeting
that occur across program and business operations functions within
the agency contribute to development of a strategic, performance-based
OMB Budget Request and accompanying Performance Plan.

Each year, NSF's Accountability and Performance Reports build on
the framework established in the GPRA Strategic Plan to provide a
unified presentation describing how the agency achieves its mission
and desired outcomes and results. These reports describe programmatic
and management goals and results, and management controls in place.
The Accounatbility Report describes the agency's financial status
and NSF compliance with laws and regulations - thereby attesting to
NSF's effective stewardship of the science and engineering enterprise
and the integrity with which the agency undertakes its mission.

With implementation of the agency's GPRA Strategic Plan in FY'01,
the agency's FY'01 Accountability and Performance Reports were the
first to reflect the strategic outcome goals of PEOPLE, IDEAS and
TOOLs.

B. Budget Account Structure

In FY'00, during development of the NSF GPRA Strategic Plan, the
agency examined the potential of alternative budget account structures.
The agency-wide working group charged with doing so concluded that
the agency should retain its current account structure, noting that
a migration to an outcome goal-oriented account structure did not
guarantee improved agency performance. In fact, the group indicated
that an artificial, separation of PEOPLE, IDEAS and TOOLS had significant
potential to reduce the effectiveness of NSF investments to realize
the agency's mission, vision and strategic goals. They concluded that
the agency's current account structure best supported the strong interrelationships
and interdependencies between PEOPLE, IDEAS and TOOLS investments.

Consequently, NSF has chosen to present a crosswalk between its
budget account structure and its PEOPLE, IDEAS and TOOLS performance-based
structure. The use of this crosswalk reflects the complexity of NSF
investments and emphasizes the synergy among NSF's three strategic
outcome goals.

C. Performance-Based Budget Justification

Prior to the implementation of GPRA, NSF's budget justification
reflected the complex interplay among the established appropriations
accounts by presenting the budget by key program functions - Research
Project Support, Research Facilities, Education and Training, and
Administration and Management. The relationship between the appropriations
accounts and the key program functions was described in a funding
crosswalk as well as in the written justification.

Beginning with the FY 2001 Budget Request to OMB and then the Congress,
NSF recast its budget to represent the agency's strategic outcome
goals of PEOPLE, IDEAS, and TOOLS. This was partly accomplished by
presenting a crosswalk between the existing appropriations account
structure and the new strategic goals, in an approach similar to that
described above. In addition, the budget justification was restructured
to consistently describe the influence of the strategic goals on specific
program Directorates and Offices.

With the completion of the FY 2001 Accountability and GPRA Performance
Reports, NSF has now taken this new performance-based structure full-circle.
This experience will contribute to the tighter integration of performance
and budget information in future budget justifications. In fact, GAO
found that NSF was among agencies that "not only developed the required
linkage and provided an estimate of funding associated with expected
performance, but also clearly indicated how that funding was derived
or allocated from the program activities of their budget requests
- the first step in defining the performance consequences of a budget
decision." (GAO-02-236 Managing for Results p.13)

D. Participation in the Federal CFO Council

NSF participates in the Performance/Budget Integration committee
established by the CFO Council to identify actions agencies may take
to demonstrate effective budget and performance integration strategies.
This committee will develop a best practices document that will be
shared government wide.

E. Workshop on Budget and Performance Integration

In May 2002 NSF, in coordination with OMB and the President's Management
Council, will convene an invitational workshop to explore the knowledge
base that informs budget and performance integration and to identify
research opportunities that will refine methodologies in this rapidly
developing area of interest. The workshop, entitled "Strengthening
Program Effectiveness Measurement of Federal Programs" will include
scholars who are recognized experts in performance measurement. This
workshop is likely to inform not only NSF's approach to budget and
performance integration, but approaches taken by OMB and other Departments
and agencies throughout government.

*********************

Standards for Success

In addition to the plans described in the preceeding section, the
agency is addressing the core criteria described in the President's
scorecard standards for success in the following ways:

I. Integrated Planning and Evaluation Involving both Budget
and Program Staff

NSF's approach to GPRA implementation, and the congruence of this
approach with the budget development process, currently provide the
framework for effective integration of planning and evaluation activities.
The agency will continue to improve its effectiveness through a variety
of approaches. One involves an over-arching analysis of the Resource
Allocation process, the Performance Assessment and Accountability
process and the Knowledge Management process as outlined in
the Business Analysis. While each of these processes is separately
identified for the purposes of the Business Analysis contract, they
are, of course, deeply intertwined. Together, they assure budget and
performance integration, especially after additional criteria for
success are identified.

Supporting Human Capital and Tool and Technologies
strategies that support NSF's mission-oriented processes will facilitate
a tighter integration of planning and evaluation. For example, increased
interaction between program and planning staff can be effected through
internal details, internal workshops, additional presentations on
aspects of GPRA and the President's Management Agenda (PMA), and more
complete development of NSF's corporate systems such as the Enterprise
Information System.

II. Streamlined, Clear, Integrated Agency Plan/Budget

Beginning with the FY'01 Budget Request to OMB and then the Congress,
NSF recast its budget to represent the new strategic outcome goals
of PEOPLE, IDEAS and TOOLS. The agency then prepared the FY'01 Performance
and Accountability Reports using the PEOPLE, IDEAS and TOOLS framework.

Based on the new reporting requirements for FY'02 GPRA reporting,
NSF will prepare a single Performance and Accountability Report that
incorporates what are currently two separate reports -- the Foundation's
annual GPRA Performance Report and the annual Accountability Report.
This new report will build on the agency's past successes to provide
a streamlined, clear, integrated presentation that describes and links
the agency's performance goals, output targets and resources necessary
to support these goals in the context of past investment results.
Quantitative output and outcome measures will be monitored throughout
the course of each year using NSF corporate systems; qualitative outcome
and output measures will be assessed using both retrospective and
prospective approaches.

III. Alignment of Staff, Budget Accounts and Program Activities

NSF's annual Budget Request includes a crosswalk that aligns the
budget account structure with the agency's three strategic outcome
goals, and contains information on the amount and range of programmatic
activities to be provided given the resource support provided for
PEOPLE, IDEAS and TOOLS.

Future efforts to align budget accounts, staff and program/activities
will be informed by the pending workshop on Budget and Performance
Integration and approaches used to explore full budgetary cost.

IV. Full Budgetary Cost

NSF's strategic outcome goals are realized through the efforts of
the agency's partners in the science and engineering research and
education communities. This impacts how the agency might determine
full budgetary costs associated with mission accounts and activities
in support of strategic goals. With respect to administrative and
management expenses, in FY'01the Statement of Net Cost described in
the agency's Accountability Report aligned administrative costs with
strategic outcome goals.

GIIC discussions will explore approaches to full budgetary cost;
these discussions will be informed by the NSF Workshop on Budget and
Performance Integration to be held in May 2002. Analysis of a range
of cost-benefit studies, evidence-based logic models and benchmarking
studies will be examined under this standard. Assignment of overhead
and capital costs to programs will also be addressed. In addition,
NSF has contracted with Pricewaterhousecoopers (PWC) to assist the
agency in evaluating cost information.

V. Program Effectiveness

NSF's effectiveness as an agency is judged by its mission responsiveness
and successful progress toward meeting its outcome goals. Qualitative
assessment of NSF's portfolio is conducted by external experts who
use both retrospective and prospective approaches. Their judgments
are influenced by their experience-based norms and incorporate investment
criteria such as quality and relevance that are widely used across
the federal government. In concert with the President's Management
Council, NSF monitors quarterly and reports annually, management performance
based on quantitative management goals and investment process goals.

Program assessments provided by external experts, and program evaluations
conducted under contract provide evidence of the effectiveness of
NSF programs. The agency uses these analyses to formulate future budget
requests. The Business Analysis will reveal opportunities to further
strengthen the relationship between program effectiveness and budget
formulation, with particular emphasis on the Resource Allocation
and Performance Assessment and Accountability core business
processes. However other core business processes will impact this
standard for success - for example, program effectiveness is also
dependent on achievement of the effective management and oversight
of NSF's grants and contracts.

Footnotes 1: NSF's statutory mission is: to promote the
progress of science; to advance the National health, prosperity and
welfare; to secure the National defense; and for other purposes.
2: PEOPLE, IDEAS and TOOLS are NSF's GPRA strategic outcome goals.
3: See discussion of the NSF Academy on p 9 and p 11.